bp to Sell 20% Stake in Oman’s Block 61 to PTTEP
bp has agreed to sell a 20% participating interest in Oman’s Block 61 to PTT Exploration and Production Public Company Limited of Thailand for a total consideration of $2.6 billion. Following completion of the sale, bp will remain operator of the block, holding a 40% interest. Subject to approval from the Sultanate of Oman and partners, the deal is expected to complete during 2021. The agreed total consideration of $2.590 billion comprises $2.450 billion payable on completion (subject to final adjustments) and $140 million payable contingent on pre-agreed future conditions. Following completion, participating interests in Block 61 will be: bp, 40%; OQ, 30%; PTTEP, 20%; and PETRONAS, 10%.
Block 61, covering around 3,950km2 in central Oman, contains the largest tight gas development in the Middle East. The block has already had two phases of development – Khazzan, which began production in 2017, followed by Ghazeer in October 2020.
These two developments, targeted at developing a total of 10.5 trillion cubic feet of gas resources, have a combined daily production capacity of 1.5 billion cubic feet of gas and more than 65,000 barrels of condensate. Gas from Block 61 is exported for domestic consumption into Oman’s national gas grid, while also boosting availability of feedstock supply for Oman LNG.
Block 61 timeline
2007: PSA for Block 61 Khazzan field signed
2007-2013: appraisal confirmed existence of significant tight gas resources
2013: Khazzan, first phase of field development, sanctioned
2016: bp signed an amendment to the Block 61 PSA agreement adding additional area to the south and west of original Block 61 development, allowing a second phase of development, the Ghazeer field
2017: first gas from Block 61 Phase 1, Khazzan, delivered ahead of schedule
2018: development of Block 61 Phase 2, Ghazeer, sanctioned
2018: OQ sold 10% interest in Block 61 to Petronas
Oct 2020: first gas from Ghazeer delivered ahead of schedule.
